The survey of 11,263 consumers also found that consumers who make both PIN-secured and signature debit purchases are the most active among all debit cardholders in terms of number of transactions, Respondents who used only signature debit made an average of 13 transactions per month, while those who used only PIN-secured debit averaged 8.9 transactions per month. But usage frequency jumped to almost 19 times per month among those who made both types of transactions.

"This latest research indicates the benefits of encouraging the use of both PIN-secured and signature debit," according to Ronald Congemi, president of Star Systems." When consumers are familiar with and have a choice of transactions, they become more active debit card users, which helps financial institutions and retailers meet their critical business goals of winning new sales, increasing revenue and enhancing customer loyalty and retention."

The number of consumers being assessed a fee to pay by debit card remained low in 2002. The study found that only 12 percent of consumers get charged for PIN-secured debit purchases, while 4 percent are charged for signature transactions. The survey also found that only 6 percent of consumers participate in ATM/debit card reward programs. Participants in reward programs were fairly evenly split between PIN-secured (30 percent) and signature (25 percent) debit reward programs. The types of rewards offered included airline miles (47 percent), points toward purchases (55 percent), sweepstakes entries (32 percent), discount coupons (36 percent) and a percentage of purchase returned (40 percent).

The research found that half of consumers continue to write checks for point of sale retail purchases. While check payment remains a high-cost, less-secure payment method for financial institutions and retailers, factors such as habit (22 percent) and lack of alternatives (19 percent) continue to account for a preference for checks among large numbers of consumers.

"Given that some retail buyers still wish to pay by cash and check, the focus for financial institutions and retailer should be on converting these users to methods that are as electronic as possible," Congemi said. "Payment methods such as check electronification are a step closer to pure electronic payment, and can provide many of the same advantages, such as enhanced security and reduced processing costs."

The number of check writers exposed to this method increased in 2002 to 33 percent, up from 26 percent in 2001. Debit payment results in higher average ticket sales versus both cash (29 percent higher) and check (22 percent higher).

Consistent with previous surveys, 51 percent of consumers prefer PIN-secured debit payment, versus 28 percent who prefer signature transactions. More than four out of five U.S. accountholders have an ATM/debit card, and 86 percent of users made a card purchase in the past 30 days. ATM/debit card usage is relatively consistent across regions in the United States.

For more than a decade, Star has conducted an annual consumer survey designed to measure behavior and attitudes regarding electronic payment services, and concerns that may inhibit usage and interest in new services. This year's random-dial telephone survey was conducted by an independent research group, which surveyed 11,263 consumers coast-to-coast between Sept. 24 and Dec.1, 2002. the margin of error is plus or minus 1 percent.